[Congressional Record Volume 154, Number 187 (Friday, December 12, 2008)]
[Senate]
[Page S10973]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              ALAN NEWMAN: CONDUCTOR OF COSMIC SYMPHONIES

 Mr. LEAHY. Mr. President, the Burlington Free Press recently 
published a profile of Alan Newman, a habitual entrepreneur who has be 
the genius and force behind a number of companies established in and 
around Burlington, VT. Anyone who has met Alan is immediately embraced 
by his creative exuberance. That creativity combined with his unique 
vision and style create a special brew that has resulted in an 
incredible run of establishing successful companies.
  I wish to recognize Alan for his accomplishments and I ask that a 
copy of the entire Burlington Free Press article be printed in the 
Record.

                  [Burlington Free Press, Dec. 8, 2008]

                          Alan Newman Opens Up

                            (By Dan McLean)

        South Burlington.--Alan Newman, co-founder and president 
     of Magic Hat Brewing Co., has helped create about a half-
     dozen Vermont-based companies. During his decades of building 
     businesses, he has learned where he excels--and when he has 
     reached his limit.
       ``My skill appears to be starting and growing businesses,'' 
     including building a brand and a culture for the company, 
     Newman said. When businesses hit about $7.5 million in annual 
     revenue and reach about 50 employees, Newman says he has 
     arrived at his ``level of incompetence.''
       Newman said he reached that modified Peter Principle with 
     Magic Hat about six years ago. Newman said if he remains at 
     the helm after a company has hit that threshold, ``the 
     organization starts to fall apart.''
       ``We started having trouble shipping things that people had 
     ordered. Communication within staff starts to falter. 
     Planning doesn't happen properly,'' he said. ``As you hit a 
     certain size, you need a little more discipline. You need a 
     little more management. That's where I start not performing 
     well.''
       ``I'm really an opportunity junkie,'' Newman said. ``I'm 
     very good at seeing opportunities and going for them . . . 
     but at some point you need to stop chasing every possibility 
     and focus on a plan.''
       That's where Martin Kelly comes in. Kelly served as CEO of 
     Magic Hat and is now CEO of Magic Hat's parent company, 
     Independent Brewers United Inc., which was formed when Magic 
     Hat bought Seattle-based Pyramid Breweries Inc. last spring 
     for $35 million.
       Newman said Kelly has been a crucial part of the operation 
     during the past few years. ``I create chaos and he tries to 
     control it,'' he said.
       Newman is president of Magic Hat, but prefers his informal 
     title, ``conductor of cosmic symphonies.'' ``
       That's really my title,'' he said.
       Newman, who had a hand in the creation of Gardeners Supply 
     Co., Seventh Generation and Magic Hat, says he has no secret 
     to starting successful ventures.
       ``I really don't. It really started by accident,'' Newman 
     said in an interview in his office located in a modestly 
     appointed trailer, named Sweet Lillian, next to the South 
     Burlington brewery.
       ``I was sick and tired of getting fired,'' he said, 
     recalling his time in Vermont in the mid-1970s. ``I just 
     figured I better figure out how to support myself if I wanted 
     to stay in Vermont. I just kind of followed my nose.
        ``I irritate people. I'm really not a good employee. I'm 
     highly insubordinate,'' he said, explaining that starting a 
     business was a better option than working for someone else. 
     ``It's been a constant theme in my life and career.'' Newman 
     insists he is in an unlikely executive.
       ``Honestly,'' he said, wearing bright-yellow glasses and a 
     tie-dye shirt. ``There is nothing in my background. I never 
     had any interest in business. I never had any interest in 
     starting businesses.
       ``I've never taken a business course in my life,'' he said, 
     downplaying the importance of an MBA. ``I'm not an education-
     driven guy. I believe in experience.''
       Newman, 62, was born in Brooklyn and grew up on Long 
     Island. He attended Long Island University with a major in 
     psychology and minors in sociology and English. ``I have 
     always been interested in culture. I grew up in the '60s.''
       Newman said his strengths are creating culture, branding 
     and a vision for the companies.
       ``The business, to me, is secondary. I'm more interested in 
     painting pictures,'' he said. A crucial part of forming a 
     company's ``painting'' is culture and philosophy. ``It's 
     never been about making money.''
       ``It's about trying to create a picture, trying to create a 
     culture and trying to marry them. This is kind of what I do 
     know,'' he said.
       For Magic Hat that philosophy is: ``to be a good neighbor 
     in our community,'' he said.
       Magic Hat, he said, assists a series of nonprofits 
     including Vermont Cares, Committee on Temporary Shelter and 
     The Women's Rape Crisis Center. ``That's the part I get 
     addicted to,'' he said.
       ``I make things more complicated'' by connecting events 
     with charities, he said. The Women's Rape Crisis Center, for 
     example, gets about $20,000 from the annual Mardi Gras 
     parade, which Magic Hat created in the mid-1990s.
       Not all of Newman's ventures have been a success.
       But he said he learns lessons--the best lessons--from the 
     failures.
       He and a friend created a yacht time-sharing company, 
     Highland International in Hanksville, in the late 1970s. 
     Highland International never generated any revenue. Newman 
     and his partner burned through $300,000 of seed money in 
     about 18 months. Reflecting on the business misfire, Newman 
     said he should have purchased one boat with the funds, 
     instead of trying to leverage it into millions. Lesson 
     learned: proceed slowly.
       Another one of Newman's business mistakes was Magic Hat's 
     Ale of the Living Dead, a garlic beer.
       One of the bottles sits on Newman's desk. The beer, he 
     said, was often returned as ``undrinkable.'' The lesson with 
     the garlic beer: ``Don't let me drive recipe creation.''
       The acquisition of Pyramid gives Magic Hat the potential to 
     place its bottles of brew on shelves in many more states. 
     Magic Hat is sold in 18 states now, mostly on the East Coast. 
     Pyramid's beers are sold in 28 states.
       Newman said they had no choice but to expand Magic Hat 
     because the company ``had already passed through the overhead 
     level where small could work.''
       Newman said the idea for Magic Hat emerged in 1993 with co-
     founder Bob Johnson. The next year the pair were making beer 
     on Flynn Avenue in Burlington. After three years, Magic Hat 
     moved to a larger operation in South Burlington. When Magic 
     Hat left Flynn Avenue, 6,000 barrels were being brewed a 
     year. This year, Magic Hat will brew about 130,000 barrels at 
     the South Burlington location, Newman said. A barrel is 31 
     gallons.
       Not including brew pubs, there are 300 to 400 
     microbreweries in the U.S. fighting for a 5 percent share of 
     the beer market, Newman said.
       ``In order to be a survivor, we think you have to get 
     bigger. You can't stay small,'' he said.
       Perhaps, recalling the lessons learned from his failed 
     yacht time-share company decades ago, when he learned to 
     ``start small and grow,'' Newman said Magic Hat's expansion 
     ``will be slow and methodical.''

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